Casino Referendum Led Gambling Industry to Spend Richly in Albany

By THOMAS KAPLAN

October 15, 2013

During the final two months of this year’s legislative session in Albany, more than three dozen companies, Indian tribes and trade groups with an interest in gambling or horse racing lobbied New York’s state government. There were more lobbyists representing the gambling industry than there are members of the Legislature.

The industry’s backers got what they wanted, and in three weeks, the state’s voters will go to the polls, deciding whether to amend the State Constitution to allow up to seven new casinos.

The proposed constitutional amendment, backed by Gov. Andrew M. Cuomo and approved twice by the Legislature, is the product of years of debate and big spending in Albany. Since 2005, gambling and horse racing interests have spent more than $59 million on lobbying and political contributions in New York, according to an analysis of disclosure filings by Common Cause New York, a government watchdog group.

The spending in New York has mirrored similar efforts in other state capitals to try to persuade policy makers to authorize more gambling. And the industry has also been a force in Washington, spending $34 million on lobbying last year, according to the Center for Responsive Politics, a nonpartisan research group.

There appears to be no end in sight for the industry’s spending in New York. Mr. Cuomo and lawmakers have agreed that, if the casino referendum passes, they will at first allow only four new casinos, all upstate, in three regions: the Catskills, the Southern Tier and the Albany area. New York already has five Indian-run casinos, all upstate, and electronic gambling at nine racetracks.

The industry would most likely seek to spend money to influence the regulatory process that would determine where exactly the new casinos are, and who operates them, as well as to persuade a future governor and Legislature to ultimately allow full-fledged casinos in New York City or the surrounding areas, which would be much more lucrative because of its tourism and population density.

“Albany is extra skilled in creating opportunities for the gambling industry to throw money at it,” said Susan Lerner, executive director of Common Cause New York. “We’re talking buckets of money, consistently, over time, and very willing recipients.”

As far back as 1981, advocates of legalizing casino gambling sponsored a billboard near the state Capitol with a concise message: “Casinos Mean Jobs,” but their push failed, and then, in 1997, another effort was doomed by an unusual coalition of opponents that included Roman Catholic bishops and Donald J. Trump.

The influence of the industry was particularly visible in the final moments of this year’s legislative session, when many companies had retained multiple lobbying firms, either to benefit from their ties to different elected officials or to keep them from being hired by rivals. All told, in May and June, the industry’s spending on lobbyists amounted to more than $1 million.

The biggest spender was Genting, a Malaysian conglomerate that runs a highly lucrative electronic gambling parlor at Aqueduct Racetrack in Queens. The company was represented by at least five lobbying firms as well as one of its own executives, and spent more than $200,000 in the final two months of the session.

The lobbying push has continued as the Nov. 5 casino referendum nears. Foxwoods, which is hoping to build a casino adjacent to the former Grossinger’s resort in the Catskills, hired the lobbying firm Malkin & Ross on Sept. 16, agreeing to pay it $50,000 to represent it for the seven weeks leading up to Election Day.

Gov. Andrew M. Cuomo has collected over $1 million in donations from gambling and horse racing interests since 2005.

Nathaniel Brooks for The New York Times

The measure is being supported by a coalition of business and labor groups; there is no organized opposition. A recent poll conducted by Siena College suggested that voters were generally divided over whether to allow more casinos, but that a majority supported the referendum when read its ballot language, which describes the hoped-for benefits of the measure.

Mr. Cuomo has been one of the industry’s major beneficiaries. Since 2005, he has collected more campaign donations from gambling and horse racing interests — over $1 million — than any other elected official or candidate in the state. Mr. Cuomo, a Democrat, has argued that upstate casinos will help the most economically struggling region of the state by creating jobs and tax revenue.

“The simple truth is, casinos have existed in New York for years to the benefit of a handful of gaming operators and to the detriment of New York taxpayers,” a spokeswoman for the governor, Melissa DeRosa, said in a statement.

Mr. Cuomo has acknowledged the potentially corrosive influence of money from gambling interests. In June, he proposed legislation that included a provision banning casino developers from donating to state elected officials, a step his office called “necessary to prevent corruption and the appearance of corruption.” But two weeks later, after negotiations between Mr. Cuomo and leaders of the Legislature, the ban on contributions disappeared from the bill.

“We couldn’t work out everything,” Mr. Cuomo said later. But he noted that gambling interests that campaign for approval of the November referendum, or make contributions to elected officials, must disclose their spending.

Some lawmakers were disappointed that the provision had been removed. Assemblyman John T. McDonald III, a Democrat from Cohoes, said he instructed his campaign treasurer to decline any contributions from casino interests, and suggested that his colleagues consider taking the same step.

“It is policy that should drive the decisions, not money,” he said.

State Senator John J. Bonacic, a Republican who represents the Catskills and is chairman of the Senate Committee on Racing, Gaming and Wagering, suggested that legal concerns caused the removal of the ban. Since 2011, Mr. Bonacic has raised at least $86,000 from gambling and horse racing interests, more than any other member of the Senate.

“When you start trying to limit political contributions, you run into constitutional problems,” he said on the Senate floor in June.

About a half-dozen states restrict political contributions from casino interests, according to the American Gaming Association, a trade group. New Jersey, for example, bans contributions to candidates from casino licensees and their top employees.

Gary A. Greenberg, a minority owner in the Vernon Downs racetrack in central New York, which includes electronic gambling, said he suspected lawmakers were thinking about their own self-interest when they backed away from the ban.

“They saw an opportunity,” Mr. Greenberg said. “They have to run every two years, and the governor every four years. They’re looking for contributions. I don’t think they wanted to totally shut out the casino companies.”